Kaliningrad gets Moscow energy boost as Baltic states pull plug | Business| Economy and finance news from a German perspective | DW | 22.03.2019
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Kaliningrad gets Moscow energy boost as Baltic states pull plug

Russia has launched a power plant to make its Kaliningrad exclave self-reliant when its EU neighbors unplug the power grid. Home to Russia's Baltic Fleet, old East Prussia is still a prime piece of real estate.

The Russian state energy holding InterRAO recently announced the launch of the Pregolsky gas-powered station with a capacity of 455.2 megawatts (MW), the largest of four stations Moscow hopes will make Kaliningrad self-sufficient in terms of energy supplies. The stations will have a combined capacity of about 1 gigawatt.

In itself it is nothing terribly special. But, in the growing war of words between Russia and NATO, Kaliningrad is becoming a strategic and symbolic hot spot.

Read moreRussia deploys nuclear-capable missile system in Kaliningrad — reports

Russian warships in Baltiysk, the port of the Russian Balt fleet.

Kaliningrad, once Königsberg, is a million-resident exclave between Poland to the south and Lithuania to the north and east. It was annexed from Germany in 1945 and was a closed military zone in the Soviet period

Once the capital of Prussia and home to philosopher Immanuel Kant, the area is still of great strategic importance to Moscow, home to the Russian Baltic Fleet at the port of Baltiysk, the country's only ice-free European port. Russia recently deployed another regimental set of the S-400 Triumph air defense missiles in the exclave.

The Mayakovskaya and Talakhovskaya plants, which are also gas-powered, have a combined capacity of 312 megawatts (MW). They started operations  last March, while the fourth, coal-powered Primorsky, could be completed in 2020 and is designed to act as a backup.

"The region will become fully energy independent once the construction of the reserve Primorsky thermal power station is completed," InterRAO cited its head, Boris Kovalchuk, as saying.

The 100-billion-ruble (€1.3 billion, $1.5 billion) project is financed by state holding company Rosneftegaz, funded by dividends from Gazprom and Rosneft.

EU pulls plug

Lithuania, along with Estonia and Latvia, intends to unplug itself from the Russian power grid and integrate into the EU grid by 2025. The three Baltic States joined the EU in 2004, but their power systems remain interconnected with Russian and Belarusian power systems along AC 330 kV lines. Kaliningrad, meanwhile, has no border with mainland Russia and has relied on Lithuania, which in turn imports power from mainland Russia.

Old less well known rivalries

The only electricity link between the Baltic States and other EU states, LitPol, was launched in 2016 berween Lithuania and Poland, carrying 500 MW of electricity. The interconnector is key for the Baltic synchronization plans, although at least one more link with Poland will be needed, experts believe.

Read moreBaltic states to decouple power grids from Russia, link to EU by 2025

But Vilnius' relations with Warsaw have not been plain sailing, with Poland reluctant about building the link, possibly due to high investments (€300 million from the Polish side), potential price competition from the electricity exported by Lithuania as well as  concerns about the environmental impact.

To push the process, the European Commission agreed recently to allow  the transmission system operator to apply for financial support from EU funds.

EU Energy Commissioner Miguel Arias Canete at a press conference

EU Energy Commissioner Miguel Arias Canete has made it clear that in the EU energy union there was "no room for energy islands and electricity has to be able to flow freely across borders"

Testing, testing 

The critical phase was due before when the Baltics were set to begin testing unplugging themselves from the Russian grid, but they were postponed and no new date has yet been agreed.

Russia is to conduct its own test by temporarily unplugging Kaliningrad from neighboring states in May, and Deputy Prime Minister Dmitry Kozak said the Baltics had told Russia they would conduct their test after Kaliningrad had conducted its own. 

Watch video 04:33

Lithuania's fence on Kaliningrad border

Gas too

On January 8, Gazprom put into operation an offshore gas receiving terminal and the Marshal Vasilevsky Floating Storage and Regasification Unit (FSRU) in Kaliningrad, Russia's first floating regasification unit. Total investment in the project was €780 million and will allow up to 3.7 billion cubic meters (130 billion cubic feet) of gas to be delivered by sea annually.

Read moreNATO chief Jens Stoltenberg wants fewer tensions, improved relationship with Russia

Lithuania has a contract with Gazprom on gas transit to Kaliningrad until 2025 and in preparation Gazprom has also set up the Kaliningradskoye underground gas storage (UGS) facility and increased the throughput capacity of the Minsk–Vilnius–Kaunas–Kaliningrad gas pipeline, the only route for gas deliveries to Kaliningrad.

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